How To Find Interested Buyers When Selling Your Home.

Many home sellers ask us what homes are selling for in their area, because they want to use that information to help choose an asking price when they list their home for sale.  However, choosing an asking price isn’t just about pricing the house or condo as high as possible to try and get the most money.

In a previous blog post we talked about strategies to get multiple offers.  But before you can get ANY offers you must create interest in the ‘world’ of potential buyers for your type of property.

You don’t want to choose the price that you hope to sell at.  You do want to choose the price that will generate the most interest from potential Buyers for your home.  The most important thing to remember is it doesn’t matter where the offers start … it only matters where the negotiations finish.  And if you’ve hired a top Agent, they should have the ability to utilize strategies to generate a lot of interest in your property, and also possess key negotiating skills to ultimately get the most money that the market will pay for your property.

The strategy depicted in this graphic is to price a home in the zone that will generate traffic.   Nobody wants to give their property away.  And the “art” of pricing your property properly can be as precise as only a 1%-5% differential. 

As you can see in the graphic, you get almost twice as much interest from potential Buyers in a home when it is priced 5% below fair market value than if you priced it just 5% above.   You get three times as much traffic when it is priced 10% below versus 10% above.

We keep saying that Toronto real estate is no longer about merely sticking a sign on your lawn and waiting for the MLS to find you a Buyer.  In fact a part-time Realtor recently said (on our Facebook page) that anything sells in Toronto if you just stick a sign on the lawn.  Well if that is true, then why is that between 38% – 43% (almost half) of listings on the Toronto MLS expire before the property actually sells?  And … of the properties that do sell … why do some remain on the market for over 30 days and sell for 90% to 95% of asking price, while other properties sell in just days for over asking price?

If you want to know more about strategies that keep more money in your pocket, give us a call: (416) 414-0554!

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What Is Risky?

Whether you are buying, selling, or investing in real estate, stocks, mutual funds, gold,
(or anything for that matter), you always have to assess the “risks” involved. 

And when people aren’t 100% familiar with the investment they are considering, they tend to fear “risk”. 

There will always be the proverbial “they” who will say that any investment is risky!  Chance are “theydidn’t manage their own risk when they invested, and they wound up losing money or having a bad overall experience.

I’m not saying that investments have no risk, nor am I suggesting you should jump into any investment blindfolded and pay no consideration to risk – that would be foolish!

But regardless of what you consider investing your money in, for you to assess if it is too risky for you (or within you risk tolerance), you must first understand what “risk” is exactly.

Some experts suggest that the more you seek to understand what you are investing in, the less risky it is.  And there is definitely truth to that statement.  But some people tend to embark on an endless journey of learning about a certain type of investment (in effort to reduce or eliminate risk), and they ultimately don’t invest in anything due to “analysis paralysis“.  That is – they become paralyzed with fear because they have become overwhelmed with facts and lost focus on how to execute their investment plan safely.

Unless you deal full-time with the type of product you are investing in (eg. for a living), you will ALWAYS feel like there is more that you could learn.  The funny thing is that most people know what a stock is, yet they have no idea what drives stock prices up or down. Yet, because the ‘norm‘ is to invest in (buy) mutual funds [because we assume that a fund manager must understand the stocks better than we do] – people go out and invest in  mutual funds every day. 

Robert Kiyosaki (author of Rich Dad Poor Dad, and co-author of Why We Want You To Be Rich with Donald Trump) once said [and he’s absolutely right]
The more control you have over something … the less risk!
The less control you have over something … the more risk there is for you!

In the real estate investment properties that we buy personally, we control virtually every factor.  And that is exactly what we show people how to do at at our Free Millionaire Real Estate Investor Info Nights!

When you buy mutual funds, you can’t tell the fund manager what stocks to buy and what to sell in the mutual fund’s portfolio.

If you don’t want to be a “hands-on” investor,  it just means you must assemble the perfect “power team” to carry out your instructions for you.  It’s called “Managing-the-Manager”.  Or you can try partnering with someone who might be more hands-on or knowledgeable.  Passive revenue is a buzz-word these days, and I do believe in passive revenue – for the right reasons.

I’ll tell you this:
1. Everybody needs a home, and there are some areas in Greater Toronto, that enjoy significantly MORE demand than supply (compared to other areas).  Thus, there is no risk of vacancy, low rent, or getting stuck with a property you can’t sell.

2. The price can drop on a stock overnight,  or a company could declare bankruptcy before you can prepare to sell your stock or mutual funds.  But while a housing market could (in theory) go down:
a) It doesn’t plummet over night (in the Greater Toronto area).
b) Our continually increasing market prices could stop increasing at the exceptional pace it has been, but since we are not in the same economic conditions as we were in the late 1980’s, we are unlikely to see the prices of our real estate drop significantly.

Where can the risk be eliminated?
… By controlling every step of the process!

Assuming that your Realtor and your “Power Team” (Mortgage Broker, Inspector, Lawyer, Contractor, etc.) did a good job of helping you research the area and property you are you are buying (investing in), here is what you CAN control:

  • What area you buy/sell in
  • How much you pay for a house/condo
  • How much it will cost you to fix or renovate
  • How much it will cost you to carry
  • How much you can get for rent/sale
  • Who you let in as tenants to rent from you
  • How long you intend to keep the property (or when you intend to sell)
  • Who you finance the property through
  • What renovations or upgrades you intend to do to the property
  • Etc ………

If you properly assess your ability to control every step of the process … you reduce the risk as much as humanly possible!

If you would like to discuss ways to reduce risk and increase profit, give us a call:
(416) 414-0554!

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Holiday Entertaining Is Coming: Tips For Dining Room Decor

The holidays are coming and if you like to entertain (or even if you don’t) and you expect to have guests coming, here are some great ideas to make your dining room “dress-to-impress”.

1. Mirrors are awesome.  They not only make the room feel bigger, they also make the room feel brighter.  And here is the best part of mirrors – people LOVE to look at themselves.  Nothing like making your guests feel special and beautiful at the same time.
Try installing a large “framed” wall mirror at one end of the room to open the space.

2. If you still have that light fixture the builder sold with the house, or an old fashioned tried, tested, and true, light fixture, it might have sentimental value.  But try using a glass type chandelier.  And to add some style and different effects of lighting, you can add some wall sconces .  If you don’t want to hire an electrician to wire the walls for sconces, you can get some now that use candles for when you entertain.

And don’t forget candles on the table.

3. You don’t need to spend $100,000 on flowers like Elton John, to simply use a nice bouquet as a centrepiece.  Flowers always make people feel great!

4.  If you have a fireplace in your dining room … fire it up.  If you don’t have a fireplace, many big box retailers these days like Canadian Tire, Home Depot, Lowes, etc. sell affordable electric fireplaces in various decors and colours.  A fireplace adds warmth and comfort to the room, and makes people feel cozy and warm in the winter.

5. These days stores sell disposable plates and utensils that actually look real.  They are enticing because you can just throw everything in the garbage after dinner (easy clean-up) rather than do the whole dishwasher thing!   DON’T CHEAP OUT!  Use different styles of glassware if you can to add character to the table.  Maybe even borrow some nice glassware from someone you know if you have to.


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Toronto Real Estate Breeds Fear

At our last Real Estate Investor Free Info Night we met several people who were fed up with their stocks and mutual funds.  The lack of control they had over their investments, and of course, the mediocre returns (on investment) were the top 2 reasons people told us.

I found it ironic that Barron’s recently posted an article about fears of investing in the stock market. They referred to a woman with over 1 million dollars in stocks, who sold it ALL, and is now looking for a better investment like Real Estate, because she is sick of the volatility in the stock markets.

Sure the article has a headline “Be more like Buffett: Buy Fear.” Warren Buffett [the famous stock investor] says that we should be greedy when others are fearful, and fearful when others are greedy.

Buying Toronto Real Estate isn’t much different than buying stocks, if you consider that stocks appear to be better as long-term investments at the moment, just like real estate.

And people who dream about buying investment real estate to build their net worth, their assets for retirement, or their means of cash flow,  typically come to our Real Estate Investor Free Info Night to learn everything they need to know about SAFE & PROFITABLE investing in Toronto Real Estate.  Yet, when it comes time for them to begin … it is FEAR that stops many from proceeding (not the excuses they come up with)!

Quite frankly, the last few years have been a great time to buy Toronto Real Estate, and those who have found the courage have been rewarded generously.  Just like a stock that pays great dividends, real estate pays great dividends … even if you don’t factor in the inevitable appreciation we see in our market [on the asset itself]. 

Furthermore, if you want to buy $100,000 of stocks, you need $100,000 in cash.
If you want to buy $100,000 of Toronto Real Estate, you need $20,000 in cash.
Now that’s “Leverage”.
Furthermore, we can show you where to find the $20,000 in cash – if you don’t have it lying in a bank account!
Now that’s “Major Leverage”

Toronto Real Estate Investment properties are cash-flowing [making money] better than ever – thanks to low interest rates. 

When people seek to learn about real estate investing in Toronto, they always ask us all kinds of questions, in hopes of becoming knowledgeable, learning the tricks of the trade, and avoiding risk.  But it is the unknown [fear of the unknown] that often  scares people from taking that first step.

Here is the plain and simple truth:
A) When you try to be a renegade and do things all by yourself, you will certainly encounter ‘unknowns’.  You will likely deal with most of them, and have difficulty with other issues.  BUT … one of the things we teach people at our Toronto Real Estate Investor Free Info Nights is who to have on your Power Team and how to use them to your advantage.  And when you work with people who have extensive experience and success in real estate investing, there really aren’t any ‘unknowns‘ that can’t be handled!

B) If you remove the ‘fear-of-the-unknown’ because you’ve removed the actual ‘unknowns’ … then the only thing stopping you is excuses.  And the common excuses are:
– I don’t have enough knowledge
– I don’t have any cash to start
– I don’t have any time

And if you had to enroll in a 2 year university course to succeed, have at least $100,000 in the bank to start, and quit your job to spend enough time managing your real estate investing efforts … your excuses would be valid.

But here is the million dollar question:
If people who have already achieved tremendous success at investing in real estate right here in Toronto, could show you how to do it without any special training, without having a bunch of cash lying around in the bank, and without quitting your job or spending huge amounts of time dealing with issues you probably don’t want to deal with … wouldn’t you at least want to know about it?
Especially … if it only took 2 hours of your time and could make you very wealthy?

Whenever we meet with people who we first met last year, and they began investing in Toronto Real Estate, and have had a wonderful experience doing it, they always say the same things to us:
1) “It was something we always meant to do and the only thing that stopped us was fear. We just stopped letting fear control us.”

2) “When we see how easy it is and how much return on investment we are now making, we only wish we had done it sooner!”

If you want to know more about the possibilities for you to build your wealth, and eliminate your fear of beginning … join us for one of our free Toronto Real Estate Investing Info nights

Or … call us directly: (416) 414-0554


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When Only ONE Person Pays The Mortgage – Slicing The Nest Egg

The relationships we choose can have ramifications for our home ownership.
Our friend Helen Morris wrote a great article for the National Post this week that we’d like to share with you.  It features some great advice from lawyers, financial planners, and other experts.

Who Pays The Mortgage?“If you are living as a couple but because of circumstance only one of you pays the mortgage, the rules are all over the map as to whether you have the same rights as a married couple upon separation,” says Christine van Cauwenberghe, an estate-
planning specialist with Investors Group.

Regardless of who pays the mortgage, it is important to get legal advice on how to set up the ownership or title of your home.

“We tell clients entering into common-law relationships to enter into some sort of cohabitation agreement… as to how the assets are going to be shared”.

“Generally, title to the property is what determines who is the owner, not who pays,” says Ray Leclair, real estate lawyer and vice-president of Title Plus at Law Pro in Toronto. “It is very dependent upon the individual facts,” he adds. That is true whether you are married or in a common-law relationship, and no matter how property ownership is set up.

“When you buy a property… you can put it as joint tenants or tenants in common,” Mr. Leclair says. “Joint Tenancy is the common way for married couples who will be taking title. They are equal owners of the property and the survivor is automatically the owner.”

If the title is registered as tenants in common, unless otherwise stated, a couple is presumed to have an equal share of the property, Mr Leclair says. However, he cautions, there have been successful claims on property based upon constructive trust and unjust enrichment.

“The constructive trust [case] was where the common-law spouse… was in a relationship for 25 years. They split up. He was the [sole] title owner. She didn’t accept that, so she went to court and established that she had a constructive trust that he held the property in trust for both of them,” Mr. Leclair says. “The unjust enrichment [case] is where two people get together, one owns but the other puts a lot of money into renovations. It would be unjust to let [only the title owner profit from the proceeds of the sale of the home].”

Mr. Leclair says marriage affects the status of the home.
“Married spouses have equal right to possession,” Mr. Leclair says. “There’s a restriction upon the title ‘spouse’… transferring, mortgaging, doing anything with the property without the written consent of the other spouse.”

Ms. Cauwenberghe says cohabitation agreements can be useful for dividing property up to a point.

“In the courts once you’ve entered into a ‘family joint venture’… raising children together, one person is moving so the other person can take a job… we’re going to get closer to the 50-50 division no matter who is making the payments,” Ms. Cauwenberghe says. “You’re making decisions as a couple.”

If you would like more information about Buying or Selling a home that you’ve shared with your significant other, give us a call.  We can talk to you about various rights and the processes to make a smooth transition.

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Beware Of Condo Repair Bills – Check The Status Certificate!

In the past 2 weeks we’ve had the pleasure of helping 2 clients search for a condo to buy.  One client bought a condo managed apartment (typically known as a “condo”) and the other made an offer to buy a condo managed town-house.

Condos can be appealing because the condo corporation (the Management) takes care of most of the maintenance and repair work.  What many people forget is that the unit owners condo maintenance fees pays for all of the work.

Every condominium complex is run by a management group. It’s this group’s responsibility to collect maintenance fees and oversee the maintenance and upkeep of the condominium complex.

And if the condo Management company is negligent in doing proper maintenance, quality repair work when needed, or not responsible enough to keep the condo corporation profitable (with a healthy cash reserve fund), then it is YOU (the condo unit owners) who foot the bill for the cash shortfall.

Thankfully, there is a way for condo buyers to do their due diligence and know what they are getting into (before it’s too late).  When we [at Shuster & Cado’] prepare offers for our buyers to purchase a condo managed property, we always have a condition [clause] in the offer that requires the Seller to provide a “Status Certificate” and allows for our Buyer’s lawyer to review and approve of it.

The Status Certificate is a fancy term for a package of reports that usually includes; financial reports, maintenance reports, engineers reports, reserve fund studies, and even more info, that allows for you and your lawyer to asses the financial stability of the corporation. A well run condo complex will have an excess of money in their reserve fund in case of emergency repairs or upgrades.

It  usually outlines past, present, and future cash outlays, budgets, and future work projects, so we can assess the future financial stability of the condo corporation.  You also want to know that the Management company is doing everything necessary to ensure your enjoyment and comfort while living in the property, as well as future potential resale value of your property.

While our client who purchased the condo apartment obtained a Status Certificate that was better than any other Status Certificate her lawyer has ever seen, the other client who offered to purchase a condo managed town-house was not so lucky.  Thankfully, the condition we put in her purchase offer allowed us to back out of the deal without penalty.

In her case (the ladder), the budget showed a $150,000 expenditure to repair roofs and water leak damage every 2 years on an ongoing basis.  With approx. 200 units, if the corporation was spending $150,000 for repairs to the roof every 15 years, that might be considered reasonable.  But if you had to fix the roof on your house every 2 years, wouldn’t you think something was wrong?

There are more than 7,000 condominium buildings in the GTA and some are more than 40 years old. By a conservative estimate, more than 25 per cent of these buildings are in trouble, meaning there is not enough money in the reserve fund to pay for necessary repairs.

Almost 40 per cent of GTA buildings do not have professional managers. One reason is that there is a shortage of qualified managers. Another is some buildings can’t afford it.

Another reason buildings fall apart is that even when the board wants to make needed repairs and sends out special assessment notices, other owners who disagree gather enough votes to remove the board and install a new one that cancels the assessment.

It takes 51 per cent of owners to replace the board. The long-term result is that the units in these buildings lose value and scare off potential buyers.


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Should You Choose an Agent Based on Commission Charged?

Real estate agents are not equal; each is unique. Remember about 10% of the agents do 90% of the business. Each has their own marketing techniques and advertising budget. By choosing an agent with a large advertising budget and company dollars to match it, you will gain greater exposure to the largest number of buyers, which is ideal. Reaching greater numbers of buyers equals better chances of a good offer.

Why would an agent willingly work for less than competitors?
There is always a reason why a broker or real estate agent would discount a real estate fee. Sometimes it’s the only way the agent feels it’s possible to compete in a highly competitive business, because the agent can’t stand apart from the competition on service, knowledge or negotiation skills.

If the sole benefit an agent brings to a table is a cheap fee, ask yourself why. Is the agent desperate for business or unqualified? Do you want to work with a desperate agent?

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